AssetCo sells loss-making Rize ETF to Cathie Wood's ARK Invest
AssetCo chair Martin Gilbert
The deal sees AssetCo receive an up-front payment of £2.625m, a deferred payment of the same amount and an earn out provision, capped at £5.25m, which will operate over five years and is subject to a conditional minimum amount.
The figure is a substantial climbdown for AssetCo, which acquired its stake in the ETF house for £16.5m just two years ago, along with a commitment to invest a further £5.25m in the business.
FCA approves AssetCo acquisition of Ocean Dial AM
ARK Invest will rename the thematic ETF provider ARK Invest Europe, which will serve as a «hub» for ARK's expansion into Europe. All existing Rize ETF index products will remain available.
As of 31 August 2023, Rize ETF held $452m in assets under management across 11 ETFs, and for the year to 30 September 2022, made a loss before tax of £2.5m on revenues of £1.9m.
The deal is completed with immediate effect owning to Rize ETF not being directly regulated.
Rize ETF founders Anthony Martin, Jason Kennard, Rahul Bhushan and Stuart Forbes will remain with the business.
The deal also sees an agreement between AssetCo and Ark Invest to launch a range of ETF products for River and Mercantile on the Rize ETF platform.
AssetCo chair Gilbert said the «best way» for Rize ETF to remain a key player in the European ETF market is to «partner with an established global player».
«We are therefore delighted to have reached agreement with ARK Invest LLP to establish Rize as their hub for expansion into Europe,» he added. «ARK are a committed and highly successful ETF player based in the US and we are extremely pleased to have reached an agreement that maintains our interest in the growth of their business for a period and also to partner with them
Read more on investmentweek.co.uk
